Citi's Rob Crowe writes in his latest "Global CP Market Commentary," "The USCP market experienced increased volatility on the week, as Fed Chair Yellen posed a relatively hawkish position at her semiannual report to Congress. In her testimony, Yellen emphasized the view that the U.S. economy has made progress toward the Fed's dual-mandate objectives of maximum employment and price stability.... Prior to Yellen's testimony, Fed Fund futures priced a 30% probability of a March rate hike, increasing to 44% post Yellen's testimony, and settling at 34% on Friday.... The combination of Yellen's testimony as well as continued demand for floating-rate paper tightened floating-rate spreads in a few bps on the week. Tier-1 issuers were able to access size in 1-year at 1mL+40 bps. Tighter spreads were off-set by LIBOR drifting higher on the week across most tenors. 3-month LIBOR started the week at 1.04%, increasing to 1.06% Thursday, and settling at 1.05% on Friday. Unsecured bank bullets traded in size in 6-months a touch wider week-over-week." It adds, "Prime assets increased on the week to $390.5 billion (+$2.5 billion week-over-week; +$8.2 billon month-over-month). According to Crane Data, the yield spread between Prime and Government funds widened out by 2 bps month-over-month to 32 bps, with Prime and Government funds offering a net yield of 48 bps and 16 bps, respectively."

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